August 28, 2015

Paranagua Grain Exports to increase 71% over next 3 months

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Officials at the Port of Paranagua in southern Brazil are expecting a significant increase in grain shipments over the next few months compared to the same period in 2014. Officials at the ports of Paranagua and Antonina indicated that grain shipments during August, September, and October should be up 71% compared to last year. During that three month period, the ports are expecting 80 grain vessels to load 5.48 million tons of grain.

Normal export activity starts to decline during this time of the year as soybean exports wind down, but this year corn exports are expected to surge along with an increase in soybean exports as well. During the three month period, the ports are expecting to export 1.79 million tons of soybeans, 1.59 million tons of soybean meal, and 2.09 million tons of corn.

One of the reasons for the increased exports in 2015 is the weaker Brazilian currency. The Brazilian real has devalued approximately 25% since the first of the year making Brazilian commodities more competitive in the world market.

The weaker currency has also stimulated the sale of safrinha corn. In the state of Parana for example, the Department of Rural Economics for the State Secretary of Agriculture (Deral) reported that by the end of July, farmers in the state had sold 25% of their safrinha corn production compared to 17% last year at this time. The safrinha corn harvest in the state is wrapping up and 90% of the corn should be harvested within a week if the weather cooperates.

Parana farmers produced a record 16.9 million tons of soybeans in 2014/15 and approximately 4 million tons are yet to be sold. According to Deral, the price of soybeans paid to producers in the state averaged R$ 61.15 per sack during July, which is 8.5% more than July of 2014.

The ports of Paranagua and Antonina have been able to handle the increased volumes thanks to investments of R$ 511 million over the last four years. By the year 2018, the total investments in the port upgrades should total R$ 577 million. The investments have been used to purchase new shiploaders, improve the berths, increase the draft, and catch up on past due maintenance. The new shiploaders alone, increased the loading capacity at Paranagua by 33%.

The implementation of a "Carga Online" (Cargo Online) system has eliminated the long lines of trucks that used to form on the highways leading to the port. Trucks today are only allowed to enter the port after they have been scheduled through the new system.